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RE: Steemit - The cryptocurrency killer-app
Hi Alex, hi guys,
I just watched Your video and see Your excitement. I just learned about steemit today and I'm new to cryptocurrencies as well.
So please forgive my noob questions as You all seem to be experts on crypto currencies here!
My question is: How does steemit make money, where is the revenue coming from when it pays people to blog and vote? As You said, a normal blogger would make money from ad revenue and affiliate programs. So how can steemit be profitable without ads /revenue from outside the platform when steems can be converted for real money? How can steemit pay for server costs, bandwith, salaries and office rent and be a profitable company?
The money is created by steemit platform. The steemit platform distribute, everyday, an equal amount of currency. This currency(steem) is worth what people are ready to pay for it, and you can see in the past few days, as more people learn and want to join the platform, this currency gains value.
So more people joining the platform create buying pressure for steem (because they want to buy steem power) which makes steem more valuable, which in turn increase the profit makes by people contributing to the platform. It is a self-reinforcing loop.
Hope that make sense :)
Thanks for Your reply! But when new people stop coming and buying steem, the system will collapse like a ponzi scheme, won't it?